Samsung said Thursday it is confident that consumer focus on 5G phones, as well as a trend toward premium products, will continue to drive the company’s strong revenue growth this year.
The comments came as overall consumer demand for smartphones remains weak. Based on this, inventories are piling up across channels, resulting in slow shipments to dealers/retailers for smartphone companies.
“While we are cautiously optimistic about shipment numbers, we are very optimistic about overall revenue growth,” Raju Pooran, senior vice president of mobile business at Samsung India, told FE.
Mr Pooran declined to disclose growth targets, but added: “We will be sensitive to driving category growth through premiumization across price points.” It’s a huge operating market. The company will outpace industry-published revenue growth. ”
Revenue from Samsung’s mobile phone business in FY23 was Rs 70,292 million, an increase of 27% year-on-year. Analysts say the company is expected to see even stronger revenue growth in fiscal 2024. One of the reasons for this is the rise in the average selling price (ASP) of smartphones, especially due to the increasing share of smartphones in the premium segment (Rs 30,000 and above).
According to market analysis firm IDC, the overall mobile phone industry’s ASP reached a record $255 (approximately Rs. 20,000,000 rupees) in 2023, an increase of 14% year-on-year. Samsung, the market leader with 18% market share, broke a record. By 2023, smartphone ASP will be as high as $338 (Rs. 27,000).
“It’s available at every price point. This helps consumers upgrade. We’ve seen consumers move directly from 2G to 4G and even 5G, and that’s the reason behind the affordability. ,” said Pooran.
5G smartphones currently account for approximately 61% of Samsung’s total smartphone portfolio, which is higher than the industry average of 52%. “We have segment leaders in every category and that will be guided by our 5G-first approach,” Pooran said, adding that we offer key features and technology at affordable rates, long-term tenure EMIs and easy funding. He added that consumers are upgrading because of the procurement scheme.
On Thursday, Samsung launched Galaxy A35 5G and A55 5G phones with multiple memory variants starting at Rs 27,999 and going up to Rs 42,999. As a key feature, the company has added his AI-enhanced camera capabilities and Samsung Knox Vault, a feature that provides protection against software and hardware attacks. With this launch, the company will have around 20 smartphone models in the market.
Currently, Samsung has a 31% market share in volume terms in the Rs 30,000-50,000 segment.
When asked about rising smartphone prices due to rising memory chip prices, Pooran said: “We recognize that the market environment is changing. Our focus is always on affordability and providing value to consumers. There will be no consequences,” Pooran said.
According to Counterpoint, smartphone shipments in India will remain flat in 2023 at 152 million units. The first half of this year was challenging as macroeconomic turmoil continued, leading to lower demand and higher inventories. Analysts say the market started to recover in the second half of this year, supported by 5G upgrades and better-than-expected festival sales. The shipment share of 5G smartphones increased by 66% over the previous year, exceeding 52% in 2023.
